Cyclical DRAM Play and AI-Driven Shifts: Analyst Eyes Micron Technology's Potential for 2024

Rosenblatt analyst Hans Mosesmann expects Micron Technology, Inc's MU earnings to align roughly with expectations this Wednesday.

The analyst expected an impact on the guidance due to China's restrictions on Micron memory in specific infrastructure segments in the country. 

Mosesmann expected an impact on August sales by up to 10%, depending on handling the pre-existing backlog during the restrictions.

The Street has already dialed in the China dynamic for Micron and believes that management's commentary of industry stabilization in supply and demand for the latter half of the year serves as a buy indicator. 

He stressed that while there is an AI trend at play here (which there is), it will not scale without significant content expansion in DRAM, and higher-value DDR5, for that matter.

The analyst liked the MU trade into 2024 on the cyclical DRAM play and the secular MOAC thesis driven by structural shifts in how the semiconductor industry deals with AI training and inference.

Price Action: MU shares traded higher by 1.13% at $66.02 on the last check Monday.